Africa Business Communities

Tanzania microfinance institutions lift entrepreneurs’ fortunes

A group of vanguard entrepreneurs in Tanzania are cashing in on the financial institutions appetite to supply them with tailor made financial products that are offering them the much needed relief as seed capital still remain the entrepreneurs’ biggest hurdle to take off. But the financial institutions are moving beyond financing the entrepreneurs and offering them trading skills and making frequent follow ups to avoid the collapse of the ventures.

Successful investors have taken advantage of the soft loans to explore opportunities few would have thought of.  Ms. Mishi Abdi from Morogoro took a loan of $500 from Taju Microfinance Institution to expand her tree and flowers nursery five years ago. Her investment has transformed her business into a company now worth $50,000 even as she remains a business coach to many startups.

The Savings and Credit Organization did not only give me the loan but also helped in marketing my products in various forums such as during agricultural shows,” said Ms. Abdi. Naseeb Ahmed and Joachim Mgisho are two deaf and dumb brothers but who have built a name and business as renowned suppliers of pool tables and furniture with a customer chain portfolio stretching from Moshi town where they are based and its environs.

On cannot easily notice their hearing challenges until you seek their services. After acquiring their skills, they needed a reliable financial institution sensitive to their challenges.

The brothers moved from one institution to the other but their request for financing was turned down, before visiting Payda Savings and Credit Cooperative Organization who walked them through what financial product was fit for the nature of their business. The two were later given a $1000 loan which has enabled them expand their business and today they have employed 15 carpenters.

They opted to employ deaf and dumb workers to motivate and bring them on board so that they can earn an honest living. “We sell a pool table at $300 and our customers are happy with our workmanship,” said Naseeb through an interpreter.  For Salvius Chimpae who once worked at a tyre making company in Dar es Salaam, the passion to continue with his forte even after the company closed shop would inspire him to go solo.  He acquired enough skills to enable him start his own venture but lacked seed capital.

This forced him to operate as a casual tyre repairer as he shopped for a financial institution which would bail him out of the difficult predicament. His priority was to have a place to set up his business.

“I was armed with skills but lacked the capital. I needed the capital but I was shy to approach any financial institution due to my status and fear of my business not performing.” he said. He got a contract to repair tyres for an Indian company specializing in cargo delivery to various destinations in East Africa. 

He was able to save and managed to approach a microfinance institution for credit. With a reliable operating base, Salvius has managed to secure prominent customers ranging from the church, government to engineering companies.  “I have hired 20 employees. I use the United States kingdom technology in tyres which is an alternative to a spare wheel for both tubed and tubeless tyres.” said the pacesetter.

He has most modern potable compressors in the region and uses a liquid to prevent tyre punctures and bursts. Payda Savings and Credit Cooperative Organization Publicity and Marketing Manager, Mr. Alpha Baraka said, “We are proud to be associated with successful SME investors who started from scratch to become movers of the regional economy. It is really satisfying that some of the most successful entrepreneurs associated with Payda Sacco kicked off by borrowing small loans but with time they have become showcases of success.”

Alpha says financial institutions need to be people focused with the key objective being to transform lives through offering capital and entrepreneurship skills. Besides training on investment skills, the Sacco connects the upcoming investors to potential buyers and gives them necessary exposure through diverse forums.

 

Share this article